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In This Issue
Axios agrees to sell to Cox Enterprises for $525 million

Axios has signed a deal to sell to its most recent lead investor, Cox Enterprises, the companies announced Monday. The cash deal values the company at $525 million, according to sources familiar with the deal.

Why it matters: The deal is structured to ensure investments will continue to flow into local news at a time when most commercial investors have abandoned local markets.

  • Axios was founded in 2016 by the same leaders who built Politico, with a focus on politics, tech and business. In 2020, it began a significant expansion into local news.

  • Cox is a multigenerational, family-owned business that got its start in local newspapers. It wants to ensure local news remains a part of its legacy in the digital era.
"A big part of this investment is to expand the number of local markets we serve. Local watchdog journalism is so important to the health of any community, and no one is more focused on building that out nationally than Axios," Cox chairman and CEO Alex Taylor said.

Details: The deal, which was signed Sunday, includes an additional new investment of $25 million in Axios' media arm to help the company expand across its local, national and subscription news products.

  • Axios Local currently operates in 24 cities and plans to expand its coverage to 30 U.S. cities by the end of 2022. Eventually, it hopes to be in hundreds of cities.

  • Axios will spin off its software arm, Axios HQ, into a separate, stand-alone company led by Axios president Roy Schwartz.
“This is great for Axios, for our shareholders and American journalism. It allows us to think and operate generationally, with a like-minded partner — and build something great and durable that lives long after we are gone,” Axios CEO Jim VandeHei said.

Deal terms: The deal values Axios at $525 million, the sources said. It has been reported that Axios projects it will reach $100 million in revenue for 2022.

  • Cox will control the board of Axios' media arm with four board seats, and Axios' three co-founders — VandeHei, Mike Allen and Schwartz — will remain on Axios' board.

  • Taylor will take one of the four board seats.

  • Axios will still control the board of Axios HQ, where Cox will have one of three board seats.
  • Axios' management will maintain control of the company's editorial direction and day-to-day operations. The deal is structured to incentivize Axios' management and current employees to stay with the outlet and continue growing its business.

  • Axios HQ is being spun off with some seed capital and plans to raise money early next year to fuel its growth as an independent firm. This year it will bring in roughly $6 million in annual recurring revenue. It has over 300 clients.

Be smart: Axios launched with a mission to deliver news to professionals in a simple format that helps them get smarter faster across an array of topics, including politics, science, business, health, tech and media.

  • It was able to scale quickly by hiring subject-matter experts to write digestible newsletters on complicated topics.
  • An Emmy award-winning show on HBO and a television partnership with MSNBC helped Axios expand its name recognition broadly across the country.

  • Axios HQ launched in 2021 with a similar mission of helping internal and external corporate communications departments communicate more efficiently with their stakeholders via proprietary email publishing software.

By the numbers: Axios has raised $55 million, but because it's always been profitable, it has much of that cash still on hand to continue investing in the business.

  • Most of Axios' revenue comes from high-level, brand awareness advertising to big companies across its 19 national newsletters, its website and podcasts.

  • It recently launched a professional news subscription, called Axios Pro, to deliver to investors and policy professionals in-depth insights on their industries.

  • Axios has over 500 employees, with nearly 100 who work for Axios HQ and over 75 who work for Axios Local. Axios HQ plans to more than double in size next year and triple its revenue.

Catch up quick: Axios was in talks to sell to German publishing giant Axel Springer last year, but that deal fell through amid unusual circumstances.

  • Cox sold a majority stake in its local TV and radio businesses to private equity firm Apollo Global Management in 2019. The Atlanta-based company still owns the Atlanta Journal-Constitution.

The big picture: Axios is one of a tiny handful of digital news startups that have sold for more than $500 million in enterprise value in the past decade.

  • Politico, which the founders of Axios built and led until 2015, sold for roughly $1 billion in 2021, a price tag that valued the company at roughly 5x its annual revenue.

  • The Athletic sold for $550 million to the New York Times earlier this year, roughly 8x its annual revenue.

What's next: The deal is expected to close within the next few weeks, following regulatory approvals.
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